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Spirit Airlines reports fourth quarter and full year 2017 results

Spirit Airlines Airbus A321-231 WL N664NK  (msn 7021) FLL (Andy Cripps). Image: 936347.

Spirit Airlines, Inc. reported its fourth quarter and full year 2017 financial results.

  • GAAP net income for the fourth quarter 2017 was $250.3 million ($3.63 per diluted share).  GAAP net income for the fourth quarter 2017 included a one-time non-cash $199.3 million tax credit1. Excluding the one-time tax credit and special items2, net income for the fourth quarter 2017 was $50.4 million ($0.73 per diluted share)3.
  • GAAP net income for the full year 2017 was $420.6 million ($6.06 per diluted share) which included the one-time tax credit1. Excluding the one-time tax credit and special items2, net income for the full year 2017 was $230.8 million ($3.33 per diluted share)3.
  • GAAP operating margin for the fourth quarter 2017 was 13.9 percent, or 13.4 percent excluding special items2.
  • GAAP operating margin for the full year 2017 was 14.7 percent, or 15.2 percent excluding special items2.
  • Spirit ended 2017 with unrestricted cash, cash equivalents, and short-term investments of $901.8 million.

“I want to thank the Spirit family for their contributions throughout 2017.  Together, we overcame several major operational challenges while still delivering a record on-time performance,” said Robert Fornaro, Spirit’s Chief Executive Officer. “Looking ahead to 2018, we are focused on finalizing a deal with our pilots union, improving upon our operational reliability, continuing to enhance our guest experience, and delivering earnings growth for our shareholders.”

Revenue Performance
For the fourth quarter 2017, Spirit’s total operating revenue was $667.0 million, an increase of 15.3 percent compared to the fourth quarter 2016, driven by a 10.4 percent increase in flight volume.

Total revenue per available seat mile (TRASM) for the fourth quarter 2017 decreased 1.8 percent compared to the same period last year, driven by a 2.2 percent decrease in operating yields.

On a per passenger flight segment basis, total revenue for the fourth quarter 2017 increased 1.1 percent year over year to $109.34 driven by non-ticket revenue per passenger flight segment increasing 3.8 percent to $53.91, partially offset by ticket revenue per passenger flight segment decreasing 1.4 percent to $55.43.

Cost Performance
For the fourth quarter 2017, total GAAP operating expense, including special items credit of $3.0 million2, increased 16.5 percent, or $81.4 million, year over year to $574.5 million.  Adjusted operating expense for the fourth quarter 2017 increased 19.2 percent, or $93.1 million to $577.5 million4. The year-over-year increase in both GAAP and adjusted operating expense was primarily driven by an increase in flight volume; higher other operating expense, partially driven by increased ground handling rates; higher depreciation and amortization expense; and higher fuel rates.

Aircraft fuel expense increased in the fourth quarter 2017 by 38.5 percent, or $48.7 million, compared to the same period last year, due to a 20.1 percent increase in the cost of fuel per gallon and a 15.5 percent increase in fuel gallons consumed.

Spirit reported fourth quarter 2017 cost per available seat mile (“ASM”), excluding special items and fuel (“Adjusted CASM ex-fuel”), of 5.20 cents4, a decrease of 4.4 percent compared to the same period last year.   The decrease year over year was primarily driven by lower aircraft rent and salaries, wages, and benefits per ASM, partially offset by higher depreciation and amortization per ASM.

“For the full year 2017, our team delivered an adjusted CASM ex-fuel of 5.51 cents, up 1.1 percent year over year.  This was an admirable performance considering the hurricanes and other disruptions this year,” said Ted Christie, Spirit’s President and Chief Financial Officer.  “Should the tentative agreement with our pilots be ratified, we will gain tools that will allow us to further improve our operational reliability and drive efficiencies, which gives us confidence that we will be able to maintain or grow our relative cost advantage.”

Labor
Spirit and its pilots, represented by the Air Line Pilots Association, reached a tentative agreement in January 2018 with the assistance of the National Mediation Board.  The tentative agreement is subject to ratification.

Fleet
Spirit took delivery of four new A321ceo aircraft and two new A320ceo aircraft and returned one leased A321ceo aircraft during the fourth quarter 2017, ending the quarter with 112 aircraft in its fleet.

Share Repurchase
During the fourth quarter and full year 2017, Spirit returned approximately $45 million to shareholders by repurchasing 1.2 million shares under our share repurchase program.

Recent New Service Announcements
Columbus, Ohio – Orlando (02/15/2018)
Columbus, Ohio – Fort Lauderdale (02/15/2018)
Columbus, Ohio – Las Vegas (02/15/2018)
Columbus, Ohio – Fort Myers (02/15/2018)**
Columbus, Ohio – Tampa (02/16/2018 )**
Richmond – Orlando (03/15/2018)
Richmond – Fort Lauderdale (03/15/2018)
Baltimore – Montego Bay (03/22/2018)
Baltimore – Denver (03/22/2018)
Columbus, Ohio – New Orleans (03/22/2018)*
Fort Lauderdale – Guayaquil, Ecuador (03/22/2018)
Columbus, Ohio – Myrtle Beach (03/23/2018)*
Fort Lauderdale – Cap-Haïtien, Haiti (04/12/2018)
Fort Lauderdale – Seattle (04/12/2018)*
Minneapolis – Myrtle Beach (04/12/2018)*
Orlando – Las Vegas (04/12/2018)
Tampa – Los Angeles (04/12/2018)
Tampa – Las Vegas (04/12/2018)
Seattle – Chicago (04/12/2018)*
Seattle – Dallas/Ft. Worth (04/12/2018)*
Seattle – Minneapolis/St. Paul (04/12/2018)*
Atlantic City – New Orleans (04/13/2018)
Detroit – Portland, Oregon (04/23/2018)*
Detroit – San Diego (04/23/2018)*

* Seasonal Summer Service
** Seasonal Winter Service

Full Year 2017 Highlights

  • As measured by the Department of Transportation, achieved a record high on-time performance
  • Added Hartford; Pittsburgh; Columbus; Richmond; Cap-Haïtien, Haiti; and Guayaquil, Ecuador to its list of destinations
  • Added 17 new Airbus aircraft (6 A320ceos and 11 A321ceos) and 2 used A319 aircraft to its fleet, and returned 2 A321ceo aircraft, ending the year with 112 aircraft.  As of year-end 2017, Spirit’s Fit Fleet™ had an average age of 5.1 years, the youngest fleet of any major U.S. airline
  • Returned approximately $45 million to shareholders by repurchasing approximately 1.2 million shares under our share repurchase program
  • Assisted Guests and employees in various regions affected by major hurricanes.  In addition to monetary donations, Spirit transported over 100,000 pounds of relief supplies in joint efforts with the American Red Cross, Operation Puerto Rico Care Lift, and many other organizations

Copyright Photo: Spirit Airlines Airbus A321-231 WL N664NK (msn 7021) FLL (Andy Cripps). Image: 936347.

Spirit Airlines aircraft slide show:

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Wizz Air increases its fleet at London Luton to 8 aircraft

Wizz Air  (Hungary) Airbus A321-231 WL HA-LXD (msn 7032) BSL (Paul Bannwarth). Image: 938323.

Wizz Air, one of the fastest growing airlines in Europe, has announced further expansion at its London Luton base, with the allocation of a further Airbus A321 aircraft to its London Luton fleet in 2018. This addition brings the total number of aircraft allocated at London Luton to eight and the total investment to $860 million.

The additional aircraft takes yearly capacity on WIZZ’s lowest-fare routes from London Luton to 7.4 million seats, representing 23% growth year on year. Wizz Air’s diversified network of 47 destinations from London Luton offers its customers the opportunity to travel to many unique and exciting destinations across 23 countries with fares from as low as GBP 13.99.

Wizz Air is also pleased to announce that it will increase flight frequency on two of its most popular routes. Starting in April, flights to Kiev will operate daily, while flights to Bucharest will increase from 21 to 26 frequencies a week.

WIZZ AIR’S FREQUENCY INCREASES ON EXISTING LUTON ROUTES:

 

Destination Weekly flights From
Kiev 5 to 7 April 19, 2018
Bucharest 21 to 26 April 19, 2018

 

This announcement comes only two months after the airline announced massive expansion of its Luton operations, where it increased the number of allocated aircraft from one to seven and announced eight new routes to Larnaca, Tirana, Tallinn, Bratislava and Lviv, Athens, Keflavik, and Bari. This ongoing rapid expansion demonstrates Wizz Air’s ongoing commitment to the UK, as it continues to deliver some of the most competitive airfares in the market to its customers.

Wizz Air’s sustained growth saw Wizz Air carry more than 5.5 million passengers on its low-fare Luton routes in 2017, an increase of 11% compared to 2016, making Wizz Air the second largest carrier at Luton Airport.

The arrival of the new aircraft will create 42 new local direct jobs, on top of the 180 jobs already created at Luton this year alone.  As a result of Wizz Air’s rapid expansion, Wizz Air is looking for enthusiastic cabin crew to join the WIZZ team and invites those who are interested in a career in aviation to one of several open days where they can find out more about a career with WIZZ.

Copyright Photo (all others by Wizz Air): Wizz Air (Hungary) Airbus A321-231 WL HA-LXD (msn 7032) BSL (Paul Bannwarth). Image: 938323.

Wizz Air aircraft slide show:

 

Is JetBlue considering adding some Airbus A321LR aircraft to fly to Ireland?

JetBlue Airways Airbus A321-231 WL N947JB (msn 6448) (Prism) LAX (Michael B. Ing). Image: 936368.

JetBlue Airways (New York), according to the Irish Independent, is considering switching some of its Airbus A321 orders to the longer-range A321LR models in order to fly nonstop to Ireland.

Aer Lingus, which is already a partner, has ordered the LR type. Both partners could be transatlantic competitors in the future.

Read the full article: CLICK HERE

Copyright Photo: JetBlue Airways Airbus A321-231 WL N947JB (msn 6448) (Prism) LAX (Michael B. Ing). Image: 936368.

JetBlue aircraft slide show:

Spirit Airlines to expand Airbus A321 operations in 2018

Spirit Airlines Airbus A321-231 WL N658NK  (msn 6736) FLL (Bruce Drum). Image: 104448.

Spirit Airlines (Fort Lauderdale/Hollywood) according to Airline Route, in 2018 will expand the number of Airbus A321 routes as more deliveries take place. The carrier will add new A321 routes from Chicago (O’Hare), Dallas/Fort Worth, Houston (Bush Intercontinental), Orlando and Tampa.

The new A321 routes:

Chicago O’Hare – Cancun daily starting on March 15, 2018

Chicago O’Hare – Houston daily from April 12, 2018

Chicago O’Hare – San Diego daily from April 12, 2018

Chicago O’Hare – Seattle/Tacoma daily from April 12, 2018

Chicago O’Hare – Tampa daily from March 15, 2018

Dallas/Ft. Worth – Minneapolis/St. Paul daily from April 12, 2018

Dallas/Ft. Worth – New York (LaGuardia) daily from April 12, 2018

Houston (Bush Intercontinental) – San Diego daily from April 12, 2018

Orlando – Baltimore/Washington daily from March 8, 2018

Tampa – Atlanta daily from April 12, 2018

Copyright Photo: Spirit Airlines Airbus A321-231 WL N658NK (msn 6736) FLL (Bruce Drum). Image: 104448.

Spirit Airlines aircraft slide show:

Wizz Air signs a MOU for 146 Airbus A320neo Family aircraft

Wizz Air's first Airbus A321

Wizz Air Holdings Plc, the largest low-cost airline in Central and Eastern Europe, announced on November 15, 2017 that, following a competitive selection process, it has signed a Memorandum of Understanding (MOU) with Airbus S.A.S. relating to the purchase of a further 146 Airbus A320neo family aircraft (72 A320neo and 74 A321neo). While deliveries will start in 2022, the bulk of the aircraft will be delivered in 2025 and 2026, following on from the delivery of the 110 Airbus A321neo aircraft ordered by Wizz Air in 2015. Under the Memorandum of Understanding Wizz Air has the right to substitute a number of the A320neo aircraft with the Airbus A321neo and vice versa, depending on its future requirements.

This new order, if approved by Wizz Air’s shareholders, would bring Wizz Air’s outstanding orders with Airbus to 282 aircraft, including also 8 Airbus A320ceo and 18 Airbus A321ceo aircraft, deliveries of which will continue to early 2019, and 110 Airbus A321neo aircraft, deliveries of which are planned to start in 2019 and continue through to the end of 2024.

Copyright Photo: Wizz Air (wizzair.com) (Hungary) Airbus A321-231 WL D-AVXI (HA-LXA) (msn 6848) XFW (Gerd Beilfuss). Image: 929984.

Spirit Airlines reports its third quarter 2017 results

Spirit Airlines Airbus A321-231 WL N671NK  (msn 7246) LAX (Michael B. Ing). Image: 936852.

Spirit Airlines, Inc. has reported its third quarter 2017 financial results.

  • GAAP net income for the third quarter 2017 was $60.2 million ($0.87 per diluted share), or $65.5 million ($0.94 per diluted share)1 excluding special items.
  • GAAP operating margin for the third quarter 2017 was 15.1 percent, or 16.4 percent excluding special items1.
  • Spirit ended the third quarter 2017 with unrestricted cash, cash equivalents, and short-term investments of $964.4 million.
  • Spirit’s return on invested capital (non-GAAP, before taxes and excluding special items) for the twelve months ended September 30, 2017 was 18.1 percent2.

“Multiple hurricanes during the third quarter 2017 caused us to cancel over 1,650 flights.  In preparation for Irma, we relocated our Systems Operations Control Center and over 305 team members and their families to our backup facility in Detroit where we ran our operations for about a week.  I am very proud of how the Spirit team pulled together to assist our guests and employees in the regions affected by the storms while keeping the rest of the network running smoothly and still delivering solid financial results.  Excluding the impact of these storms, we estimate our third quarter on-time performance would have been 78.5 percent, a 2.2 percentage point improvement year over year,” said Robert Fornaro, Spirit’s President and Chief Executive Officer.  “It was a challenging quarter on many fronts and I want to thank our entire team for their dedication in going the extra mile to care for our guests and volunteering to assist with the relief efforts.”

Spirit carried over 3,000 guests and more than 800 team members and their families to safety, many of whom were elderly or at risk.  We have transported over a 100,000 pounds of relief supplies in joint efforts with the American Red Cross, Airlink Operation, Puerto Rico Care Lift and many others, have pledged to match donations up to $150,000 to the American Red Cross, and are committed to assist with ongoing relief efforts throughout the Caribbean.

Revenue Performance
For the third quarter 2017, Spirit’s total operating revenue was $687.2 million, an increase of 10.6 percent compared to the third quarter 2016, driven by an 11.2 percent increase in flight volume.  During the third quarter 2017, Spirit canceled over 1,650 flights related to Hurricanes Harvey, Irma, and Maria.  Spirit estimates these hurricanes, together with the revenue overhang from the pilot work action earlier in the year, negatively impacted third quarter 2017 revenue by approximately $40 million and operating income by approximately $39 million.

Total revenue per available seat mile (TRASM) for the third quarter 2017 decreased 6.3 percent compared to the same period last year, primarily driven by lower passenger yields as a result of aggressive competitive pricing action in many of our markets.

On a per passenger flight segment basis, total revenue for the third quarter 2017 decreased 0.5 percent year over year to $108.96 due to ticket revenue per passenger flight segment decreasing 3.2 percent to $56.48, partially offset by non-ticket revenue per passenger flight segment increasing 2.6 percent to $52.48.

Cost Performance
For the third quarter 2017, total GAAP operating expense, including special items of $8.4 million3, increased 20.0 percent, or $97.0 million, year over year to $583.1 million.  Adjusted operating expense for the third quarter 2017 increased 20.2 percent, or $96.4 million to $574.8 million4. The year-over-year increase in both GAAP and adjusted operating expense was primarily driven by an increase in flight volume, higher passenger re-accommodation expense (recorded within other operating expenses), and higher fuel rates.

Aircraft fuel expense increased in the third quarter 2017 by 29.9 percent, or $36.5 million, compared to the same period last year, due to a 12.2 percent increase in the cost of fuel per gallon and a 15.3 percent increase in fuel gallons consumed.

Spirit reported third quarter 2017 cost per available seat mile (“ASM”), excluding special items and fuel (“Adjusted CASM ex-fuel”), of 5.42 cents4, a decrease of 1.1 percent compared to the same period last year.   The decrease year over year was primarily driven by lower maintenance and salaries, wages, and benefits per ASM, partially offset by higher passenger re-accommodation expense and depreciation and amortization per ASM.

Labor
Spirit and its pilots, represented by the Air Line Pilots Association, remain in open contract negotiations under the supervision of the National Mediation Board.

Fleet
Spirit took delivery of three new Airbus A321ceo aircraft and one new A320ceo aircraft and returned one leased A321ceo aircraft during the third quarter 2017, ending the quarter with 107 aircraft in its fleet.

Spirit Airlines is likely to replace its Airbus A319 fleet with newer A320neos by around 2023 (see fleet plan below).

Share Repurchase Authorization
On October 25, 2017, Spirit’s Board of Directors authorized a repurchase program of up to $100 million in aggregate value of shares of Common Stock, par value $0.0001 per share, from time to time in open market or privately negotiated transactions. The authorization will expire on October 25, 2018. The timing and amount of any stock repurchases are subject to prevailing market conditions and other considerations.

Recent New Service Announcements
Boston – New Orleans (11/09/17)
Minneapolis-St. Paul – New Orleans (11/09/17)
Newark – New Orleans (11/09/17)
Tampa – New Orleans (11/09/17)
Newark – Las Vegas (11/09/17)
Chicago – West Palm Beach (11/09/17)*

* Seasonal Service Operates 11/9/17- 4/11/18

Copyright Photo: Spirit Airlines Airbus A321-231 WL N671NK (msn 7246) LAX (Michael B. Ing). Image: 936852.

JetBlue reports 3Q net income of $179 million

Special titles: JetBlue Airways' 200th Aircraft

JetBlue Airways Corporation on October 24, 2017 reported its results for the third quarter 2017:

  • Operating income of $310 million, a decrease of 12.4% from the third quarter of 2016.
  • Pre-tax income of $293 million, a decrease of 11.2% from the third quarter of 2016.
  • Third quarter net income of $179 million, or $0.55 per diluted share. This compares to JetBlue’s third quarter 2016 net income of $199 million, or $0.58 per diluted share.

Financial Performance

JetBlue reported third quarter operating revenues of $1.8 billion. Revenue passenger miles for the third quarter increased 2.3% to 12.2 billion on a capacity increase of 3.7%, resulting in a third quarter load factor of 85.1%, a 1.2 point decrease year over year.

Yield per passenger mile in the third quarter was 13.32 cents, up 1.0% compared to the third quarter of 2016. Passenger revenue per available seat mile (PRASM) for the third quarter of 2017 decreased 0.4% year over year to 11.34 cents and operating revenue per available seat mile (RASM) increased 0.9% year over year to 12.67 cents.

Compared with last year, operating expenses for the quarter increased 9.1%, or $125 million. Interest expense for the quarter declined 18.5%, or $5 million, as JetBlue continued to reduce its debt. JetBlue’s operating expense per available seat mile (CASM) for the third quarter increased 5.2% year over year to 10.50 cents. Excluding fuel, third quarter CASM1 increased 2.7% to 8.07 cents.

“Our third quarter results were impacted by two hurricanes that reduced our EPS by approximately 6 cents. We are confident that the adjustments we are making to our network will limit any ongoing financial impact in 2018. Despite the short-term challenges, we remain focused on our long-term margin commitments to our shareholders. I’d like to thank our 21,000 Crewmembers in our operation and support centers, who successfully managed the unprecedented challenge of over 30 consecutive days of irregular operations,” said Robin Hayes, JetBlue’s President and CEO.

Fuel Expense and Hedging

In the third quarter of 2017 JetBlue had hedges in place for approximately 10% of its fuel consumption. The realized fuel price in the quarter was $1.69 per gallon, a 14.6% increase versus third quarter 2016 realized fuel price of $1.48.

JetBlue has hedged approximately 10% of its fourth quarter of 2017 fuel consumption using jet fuel swaps. Based on the fuel curve as of October 13th, JetBlue expects an average price per gallon of fuel, including the impact of hedges and fuel taxes, of $1.83 in the fourth quarter of 2017.

Liquidity and Cash Flow

JetBlue ended the quarter with approximately $814 million in unrestricted cash and short term investments, or about 12% of trailing twelve month revenue. In addition, JetBlue maintains approximately $625 million in undrawn lines of credit.

During the third quarter, JetBlue repaid $53 million in regularly scheduled debt and capital lease obligations. JetBlue anticipates paying approximately $57 million in regularly scheduled debt and capital lease obligations in the fourth quarter 2017 and approximately $194 million for the full year 2017. In the third quarter, JetBlue completed a $130 million accelerated share repurchase program and has completed $380 million in share repurchases to date in 2017.

“Despite unprecedented ATC challenges, repeated hurricane events, and a competitive industry pricing environment, we’ve been able to sustain solid margins, make progress towards our long-term margin commitments and return capital to our shareholders,” said Steve Priest, JetBlue’s EVP Chief Financial Officer.

Fourth Quarter and Full Year Outlook

Capacity is expected to increase between 4.5% and 5.5% year over year in the fourth quarter 2017. For the full year 2017, JetBlue expects capacity to increase between 4.0% and 5.0%.

RASM growth is expected to range between (3.0%) and 0.0% for the fourth quarter 2017 compared to the same period in 2016.

CASM excluding fuel is expected to grow between 5.0% and 7.0% for the fourth quarter of 2017. For the full year 2017, JetBlue expects year over year CASM excluding fuel to grow between 4.0% and 5.0%.

Copyright Photo: JetBlue Airways Airbus A321-231 WL N942JB (msn 6279) (Prism – Our 200th Aircraft) JFK (Marcelo F. De Biasi). Image: 925119.